Supporting Minority Business at "The Next Level"

Last week I had the opportunity to attend the annual Minority Enterprise Development Week or “MED Week” conference in Washington D.C. which is put on by the U.S. Department of Commerce and its Minority Business Development Agency or MBDA. The event attempts to capture the primary issues impacting minority firms across the country and identify strategies to attack those issues. The clear message coming out of this year’s conference was that the MBDA is focused on growing larger scale minority businesses, which the MBDA defines as “Growing the next generation of $100 million+ businesses”.

What I found most interesting was that the “how” was principally focused on such strategies as mergers and acquisitions, joint ventures, and strategic alliances. While this was encouraging, and totally consistent with an article that I prepared some time back entitled “Collaborations: The Key to Business Growth & Sustainability”, a couple of things occurred to me:

First, we have been right on target in Northeast Ohio over the past several years in delivering a message of growth for minority firms, and encouraging minority entrepreneurs and interested stakeholders to shift from historical mindsets that too often resulted in lower growth firms, to adopt mainstream growth strategies such as mergers, acquisitions, and accessing venture capital. 

Secondly, while adopting new growth strategies, it’s important to avoid a “one size fits all” agenda for minority firms. For example, at the MBDA conference it was stated from the podium that we should get away from growing “organic” startup businesses and focus on joint ventures. While I’m sure the speaker meant well, this is a very dangerous message. We must continue to grow high growth organic businesses focusing on new and innovative technologies to ensure that minority firms are also a major part of tomorrow’s landscape of technology based businesses. The more practical message in my opinion is to frankly combine organic business growth with an acquisition strategy so that while a business is expanding through developing new client relationships and opening new markets, it can subsequently begin to think about growing through the acquisition of a competing or related business once the operation reaches the appropriate size and capital structure.

Lastly, this “staged or multi-phase growth strategy” also speaks to the importance of having varying levels of support for minority firms focusing on different aspects or phases of the business’ growth cycle. Stated another way, we must ensure that we have the appropriate number of co-existing, non-duplicative business assistance organizations in place, staffed with the right levels of expertise, so that as a high growth business matriculates from one growth phase to another, it can continue to receive the appropriate level of support through an integrated and collaborative business assistance network.

Much work lies ahead in the ongoing pursuit of economic parity for all citizens, but we are clearly moving in the right direction.

Darrin is Chief Economic Inclusion Officer of JumpStart and President of JumpStart Inclusion Advisors. He founded and ran his own strategic planning and management assistance firm and spent 16 years in the commercial banking and finance industry. Darrin has an MBA from Baldwin Wallace College and an undergraduate degree from Mount Union College. He has led a series of workshops and seminars on matters of economic development and diversity.